Forex news for US trading on April 7, 2016
- US stocks down but off the lows at the close
- SF Feds Williams: Can support at least two more rate hikes this year
- US consumer credit rises $17.2 Billion vs estimate of 14.9B
- US Crude futures settle at $37.26 down $0.49 or 1.3% on the day
- Fed Dream Team gathers tonight on panel discussion
- Some dollar buying perhaps...
- European stocks end like the current London weather, soggy and miserable
- Can 0.7500 survive in AUDUSD?
- Forex technical analysis: EURUSD bounces off 200 hour MA...
- ECB's Smets: Door not closed on more interest rate cuts
- Draghi: Important challenges remain - Livesquawk
- US stocks not bringing any positivity to the table
- Chinese policies have been misread says Lagarde
- IMF's Lagarde says they are likely to lower the growth outlook a little
- Other comments from ECB Visco: Credibility a concern if you miss target for a long time....
- Speaking of intervention, Denmark is warming up the printers
- ECB Visco: Risk of de-anchored inflation expectation has risen
- February 2016 Canadian building permits 15.5% vs 4.8% exp m/m
- US initial jobless claims 267k vs 270k exp
- Dollar bulls aren't throwing in the towel but they're crumbling
- The strongest and weakest currencies as NA traders enter for the day
The NY session (and the day for that matter) was dominated by talk about the JPY. The currency was up against all the major currency pairs. Unwinding of carry trade where traders sell stocks and buy by JPY was cited as a potential reason. For me...falling below the 110.00 level yesterday was a technical catalyst. The market price today, also fell below trend line support at the 109.31 level (that trend line held support yesterday at the lows). OF course a breaking of the trend line will not be given on the business channels. So we will go with unwinding of carry trades today for the JPYs catalyst higher today.
Going forward, expect the USDJPY to get more interest from the financial press and business news. There was a lot of finger pointing and blame - for the stock markets poor performance - on the JPY today. Of course not to long ago, a higher dollar was blamed for lower earnings and a falling stock market. A weaker dollar is now bad news for the economy and earnings. Go figure.
The EURUSD remains between support and resistance with 1.1465 above and 1.1320 below. The pair did spend most of the NY session below interim resistance against the 1.1386 level. There was one squeeze which took the price to a NY session high of 1.1399 but that was reversed. In the new trading day, the 200 hour MA is moving higher and catching up with the price. It currently is at 1.1344. A move below the 200 hour has other low levels to get to and through (like the lows for the week between 1.1326 and 1.1335), but I would still expect sellers on a break. PS the range this week is 127 pips. The low for 2015 was 124 pips during the week of the US Thanksgiving when action is really quiet on Thursday and Friday. This week would be the 3rd lowest trading range going back to August 2014 (the 2nd lowest trading week was Christmas week 2014). Do we extend on Friday? If the extension is to the upside we would need to get above the 1.1386 level. Right now the sellers have the upper hand.
The GBPUSD is going out near low levels for the day. The NY session saw the price move higher at first, but it could not extend above the Wednesday close of 1.4121 (the high reached 1.4116). The pair has support between 1.4032-1.4058. On Wednesday, the price moved below that level and failed. That prompted a 100% correction of the move lower. Now - a day later - we are back down testing the level. A move below should solicit more selling.
It is Friday in the Far east so activity should be light. There is a 1st time ever panel discussion though with Fed chair Yellen and the last 3 Fed Chairs - Mssr. Bernanke, Greenspan and Volker. Although the potential exists for some fireworks, I expect the past chairs to respect the current chair and not cause too many ripples. Nevertheless, it is made for TV type stuff.
Have a great weekend.
